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&#39Off-the-shelf supermart term cover creating IHT bills&#39

Selling life cover through supermarkets may help bridge the protection gap but consumers may be building up inheritance tax bills, warn industry experts.

Bright Grey products director Roger Edwards says even the cheapest life cover needs advice.

For every £100,000 of cover taken out, £40,000 could end up being paid in inheritance tax, which could have been avoided by putting the term policy under trust.

Abbey for Intermediaries head of protection, marketing and product development Nick Kirwan says even term cover is “not completely vanilla” and needs an element of advice.

Norwich Union marketing manager Simon Quick says its literature tells customers that they can request a trust form.

He says: “There is clearly a role for products which can be bought off the shelf where a customer knows just what they want and does not feel they require any advice. However, there is a huge demand for people wanting to buy these products with advice. The success of the IFA market is testament to this.”

Edwards says: “What is not going to happen when you pick up the leaflet at the checkout is an assistant who can give you the advice you need to avoid that potential inheritance tax bill.”

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